Do to the high federal tax rates on capital gains (not to mention the increase in 2013, bumping those in the highest tax bracket up by 5%), many are looking for ways they can save on their capital gains income. Charitable Remainder trusts in Florida, sometimes written as CRUTs or CRATs, are the perfect tool for such goals.
Creating a charitable remainder trust in Florida has some major benefits:
- Creating a charitable remainder trust in Florida lets you convert a highly appreciated asset(like stock or real estate that has increased in value since purchased) into a lifetime stream of income.
- It can reduce your income taxes now and will decrease your estate taxes when you die.
- You pay no capital gains tax when the assets held by the charitable remainde trust are sold, and it lets you make charitable contribution deductions to reduce your income taxes, and help one or more charities that have special meaning to you.
- With all capital gains taxes considered, a charitable remainder tax can mean preserving 20-30% of the value of an asset to benefit you and one or more charities of your choice.
Of course, however, a charitable remainder trust is not the right tool for everyone. If you are just beginning your Florida estate planning, you might want to consult with a professional to understand if and how a charitable remainder trust can benefit you. It’s worth noting too, and any Boca Raton wills and trusts attorney will tell you, that factors such as life expectancy, number of heirs, and projected income can all affect how and if a charitable remainder trust is the right choice for you.
Do you have any experience with creating or using charitable remainder trusts in Florida? If so, leave a comment below.
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